"It's an education, antipoverty, and family-planning program all rolled into one," says Jos Gmez de Len, national coordinator of the government program, Progresa.

The money kicks in when rural and especially Indian children normally start to drop out - the third grade. A third-grader earns about $7 a month for staying in school.

To help overcome the traditional prejudice that girls don't need as much education as boys, girls who stay in high school "earn" more than boys - about $26 a month - for sticking to the books. Mexico's program has a per-family limit of $65 a month to avoid rewarding big families. Mothers who receive the money attend discussion groups on topics from girls and education to limiting family size.

In Brazil, a similar program in the federal district of Brasila pays the minimum wage to families that keep children in school. A savings account is also created for each child where a year-end bonus is deposited - accessible only after four years of schooling. That program - which pays parents $20 a month for each child - is benefiting about 50,000 children so far, according to government officials. But it barely makes a dent in the 2 million children estimated to be providing cheap labor in Brazil.